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New Delhi, July 9, 2001 FICCI has strongly suggested that the provision of Special Safeguards available under the WTO agreement on agriculture be extended to all developing countries. In a study done by the WTO division of FICCI, it is evident that such special safeguards mechanism is discriminatory, as only 39 out of 141 member-countries currently have the right to use a combined total of 6072 special safeguards on agricultural products. It is interesting to note that the European Union maintains the right to invoke such safeguards on 539, Switzerland-Liechtenstein on 961, US on 189, Mexico on 293, Japan on 121, and Canada on 150 agricultural products. In terms of percentage (i.e. number of agricultural tariff lines covered by the special safeguards as a proportion of the number of all agricultural tariff lines of the member concerned) Switzerland-Liechtenstein maintains special safeguards on 59 per cent, Norway on 49 per cent, South Africa on 39 per cent, EU on 31 per cent, Mexico on 29 per cent Japan on 12 per cent, Canada on 10 per cent and US on 9 per cent of all agricultural tariff lines.
Special Safeguards: who has reserved the right?
According to special safeguard provisions of the WTO Agreement on Agriculture, for products whose non-tariff restrictions have been converted to tariffs, additional duties could be levied if the volume of imports of that product increases above a certain threshold, or if its import price falls below a trigger price. It also specifies that the special safeguard can only be used where countries concerned have explicitly reserved the right to invoke this clause by designating the products in their schedules. It is notable that the special agricultural safeguard mechanism does not require the complainant to show that imports caused injury. Such automatically triggered safeguard measures in rich countries have been used to block imports from developing countries. These trade regulations block imports when world prices fall below a pre-set threshold and when imports exceed expectations. Even in its recent initiative to abolish tariffs on exports from the world’s 48 poorest countries (everything but arms proposal), Europe retained safeguards against flood of imported bananas, rice and sugar. Special safeguards are supposed to provide a cushion for producers against surges in imports and precipitous reductions in world prices. However, these safeguards are being used as an integral part of market management systems. For example, in the case of European Union's sugar, they render the negotiated reduction in the tariff effectively irrelevant, as sugar entering the European Union at world prices would be sufficient to trigger the special safeguard arrangements in most years. The analysis shows that the use of special safeguards has increased between 1995 and 1999. While less than 50 special agricultural safeguard actions (price-based and volume-based taken together) were triggered in 1995, the number went up to 179 in 1996 and stood at around 135 in 1998 and 1999. Since 1995, EU has triggered such safeguards 172 times, US 227 times and Japan 91 times! These safeguard actions were taken mostly on products of export interest to developing countries including dairy items, animal products, sugar, tea, coffee, beverages & spices, fruits and vegetables, etc. Special Agricultural Safeguard Actions by Product Groups (1995-1999)
Developed countries like EU and Japan have proposed, not to the surprise of developing countries, the continuation of the Special Safeguards (SSG) under Agreement on Agriculture. Several countries have come out with a support for extending this special safeguard clause to other developing countries as well. A selection of these proposals is given below:
The SSG in the Agreement on Agriculture can be applied by any member, provided: (a) non-tariff measures were tarrified at the time of the Uruguay Round of Agreement on Agriculture (URAA); and (b) the right was formally reserved by the member. Since most developing countries used simple tariffs prior to the Uruguay Round of Agreement on Agriculture, few of them have access to the SSG clause. India must press for correction of this asymmetry in WTO, maintains FICCI. The right to use the special agricultural safeguard would lapse if there is no agreement in the current negotiations to continue the reform process initiated in the Uruguay Round. As India is not in a position at present to claim exemption under BOP clause, there is a need for such special safeguards to be accessible to us and other developing countries, irrespective of tariffication, in the event of a surge in the imports or a decline in prices so that the food and livelihood security of our people could be ensured. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||